Delfin Group — Earnings Release 2022

May 11, 2022

Unaudited results for 3 months ending 31 March 2022

Key characteristics

founded in 2009 business segments 4 branches 90+ cities 38

employees 300+

customers 400 000+ profitable operations 12 YEARS

Q1 highlights

1

CHANGES IN MANAGEMENT

On 1 March Sanita Zitmane was appointed as a Member of the Management Board.

DIVIDEND DISTRIBUTION

Shareholders of the company approved dividend payment in the amount of EUR 780 thousand, namely EUR 0.0172 per share for Q4 2021.

³ MAJOR DEALS

Acquisition of AS Moda Kapitāls pawn shop business was completed.

4

2

PRODUCT IMPROVEMENTS

VIZIA consumer loan limit increase from EUR 7 000 to 10 000.

Selected financials

Financial report

Total loans issued

EBITDA

Total revenue, quarterly cumulative

Profit before tax

Despite the Covid-19 restrictions DelfinGroup showed strong performance in issuance of new loans. Compared to Q1 2021 company issued more than 61% in new loans.

1st, 2nd and 3rd wave of COVID-19 restrictions in Latvia

Consumer loans

Financial report

Consumer net loan portfolio

Weighted average term of loans issued

Average loan*

Non-performing loan ratio

1st, 2nd and 3rd wave of COVID-19 restrictions in Latvia

*Average consumer loan balance for one client at the end of period

Pawn loans

Financial report

Pawn net loan portfolio

Redemption rate*

Average pawn loan amount

Despite the Covid-19 restrictions in Latvia DelfinGroup showed strong performance in pawn loan segment. Compared to Q1 2021 company issued more than 30% in new loans.

Retail of pre-owned goods*

Financial report

Sale of pre-owned goods

Number of items sold

Gross margin

Sales split by product category (3M)

1st, 2nd and 3rd wave of COVID-19 restrictions in Latvia

*Excluding wholesale of precious metals (scrap)

Financial ratios

Financial report

Cost-to-income ratio*

Cost of interest-bearing liabilities

Interest coverage ratio*

ROE**

*Last 12 months figures **Annualized. Decrease of ROE in Q1 2022 is a result of increased equity after attracting funds during the IPO process.

1st, 2nd and 3rd wave of COVID-19 restrictions in Latvia

Financial report Capital structure

Capital structure, Q1 2022

DelfinGroup on Mintos

• Since 2016
• 76.3 thousand active investors
• Investors from 114 countries

Bond financing track record

Consolidated income statement

INCOME STATEMENT, EUR'000	2021 Q1	2022 Q1	Change %
Total revenue	6,018	7,476	+24%
Cost of sales	-748	-894	+20%
Credit loss expense*	-877	-1,279	+46%
Interest expenses and similar expenses	-1,011	-689	-32%
Gross profit	3,382	4,614	+36%
Selling expenses	-1,326	-1,757	+33%
Administrative expenses	-945	-1,279	+35%
Other operating income	16	24	+49%
Profit before tax	1,128	1,601	+42%
Income tax expense	-324	-188	-42%
Net profit	804	1,414	+76%
EBITDA	2,399	2,581	+8%

* For the purpose of comparison, other operating expenses are reclassified to credit loss expense as major part of other operating expenses are losses from cession of non-performing loans (debt sales).

** Data reflected according to restated comparatives in newest FS's.

Financial report Consolidated balance sheet

BALANCE SHEET, EUR'000	31.12.2021	31.03.2022	Change %
Fixed and intangible assets	1,201	1,301	+8%
Right-of-use assets	2,973	2,915	-2%
Loans to related parties	-	-	-
Net loan portfolio	42,962	47,091	+10%
Inventory and scrap	1,949	2,138	+10%
Other assets	520	541	+4%
Cash	2,460	1,704	-31%
TOTAL ASSETS	52,065	55,690	+7%
EQUITY	17,377	18,011	+4%
Share capital and reserves	4,532	4,532	0%
Share premium	6,891	6,891	0%
Retained earnings	1,731	5,175	+199%
Profit/loss for the current year	4,224	1,414	-67%
LIABILITIES	34,687	37,678	+9%
Interest-bearing debt	29,412	31,644	+8%
Trade payables and other liabilities	1,970	2,788	+42%
Lease liabilities for right-of-use assets	3,305	3,246	-2%
TOTAL EQUITY AND LIABILITIES	52,065	55,690	+7%

Dividend policy

Regular cash distribution to shareholders

Dividend payments

• 5 times a year:
• 4 quarterly
• 1 annual

Quarterly dividends

• Up to 50% from previous Q profit Annual dividends
• In amount to ensure optimal capital structure

Dividend distribution

Dividend period	Dividend payment date	EUR/share	EUR total	Payout ratio*
Q1 2022**	29.06.2022	0.0155	702 454	49.69%
Q4 2021	12.04.2022	0.0172	779 497	49.72%
Q3 2021	29.12.2022	0.0113	512 111	49.91%
Annual 2021	17.05.2022 15.07.2022	0.0552	2 501 642	-

*Dividend amount paid from the net profit of the respective quarter. **Proposed dividends by the Management Board. Decision on approval to be made at Extraordinary Shareholders' Meeting.

Share performance

Share price, €

Share dynamics compared to indexes

31.03.2022	DelfinGroup	Financial industry**
Capitalization m €	64.7	-
EPS TTM €*	0.114	-
P/E	12.5	14.8
ROE (quarterly)	32.0%	12.8%

DGR1R – DelfinGroup OMX_Baltic_Benchmark_GI OMX Riga_GI

*Calculations based on weighted average of total outstanding shares that increased in 2021 due to stock split and listing of new public shares. **Average ratio for financial services companies listed on Nasdaq Baltic Main list at 31.03.2022.

Be updated about the latest DelfinGroup news by subscribing to our newsletter

SUBSCRIBE TO RECEIVE NEWS ABOUT:

• DelfinGroup results
• Dividend distribution
• Industry news
• Other significant information

Visit our website to subscribe

www.delfingroup.lv

Appendix

Consolidated income statement

BALANCE SHEET, EUR'000			2019		2020					2021
	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1
Total revenue	4,936	5,429	5,951	5,861	6,020	5,195	5,788	6,659	6,018	5,918	6,463	7,089	7,476
Cost of sales	-756	-856	-1009	-982	-1215	-961	-993	-1,055	-748	-1,015	-849	-1,057	-894
Credit loss expense*	-408	-643	-695	-893	-725	-439	-303	-850	-877	-445	-954	-263	-1,279
Interest expenses and similar expenses	-536	-664	-739	-914	-823	-887	-808	-1,115	-1,011	-852	-920	-1,044	-689
Gross profit	3,236	3,266	3,508	3,072	3,257	2,908	3,684	3,639	3,382	3,607	3,741	4,726	4,614
Selling expenses	-1,185	-1,420	-1,325	-1,496	-1,342	-1,155	-1247	-1,703	-1,326	-1,442	-1,524	-1,832	-1,757
Administrative expenses	-707	-863	-876	-1,042	-855	-776	-865	-765	-945	-1,050	-1,018	-1,200	-1,279
Other operating income	6	52	16	21	4	25	16	28	16	11	29	29	24
Profit before tax	1,350	1,035	1,323	555	1,064	1,002	1,588	1,199	1,128	1,125	1,227	1,723	1,601
Income tax expense	-338	-2	-3	-7	-26	-7	-462	-259	-324	-299	-201	-155	-188
Net profit	1,012	1,033	1,320	548	1,038	995	1,126	940	804	826	1,026	1,568	1,414
EBITDA	1,915	1,784	2,112	2,376	2,110	2,155	2,659	2,629	2,399	2,241	2,402	3,126	2,581

* For the purpose of comparison, other operating expenses are reclassified to credit loss expense as major part of other operating expenses are losses from cession of non-performing loans (debt sales).

** Data reflected according to restated comparatives in newest FS's.

Consolidated balance sheet

BALANCE SHEET, EUR'000			2019			2020 2021
	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1
Fixed and intangible assets	652	621	775	691	748	860	927	1,038	864	818	790	1,201	1,301
Right-of-use assets	-	-	-	2,049	1,950	3,056	2,928	3,194	3,281	3,145	3,013	2,973	2,915
Loans to related parties	1,295	1,389	1,397	1,308	1,376	1,381	376	474	445	-	-	-	-
Net loan portfolio	20,761	26,609	29,474	31,547	32,493	32,256	34,040	34,674	32,220	33,265	38,182	42,962	47,091
Inventory and scrap	1,111	1,173	1,231	1,155	1,224	1,186	1,545	1,534	1,693	1,533	1,797	1,949	2,138
Other assets	339	256	231	384	503	536	365	655	495	331	746	520	541
Cash	2,686	469	1,296	1,136	2,037	1,958	2,434	4,592	1,907	594	2,541	2,460	1,704
TOTAL ASSETS	26,844	30,517	34,404	38,270	40,331	41,233	42,615	46,161	40,905	39,686	47,069	52,065	55,690
EQUITY	5,466	6,499	7,819	8,367	9,405	10,401	9,513	9,454	8,639	8,108	8,696	17,377	18,011
Share capital and reserves	1,500	1,500	1,500	1,500	1,500	1,500	4,000	4,000	4,000	4,000	4,000	4,532	4,532
Share premium	-	-	-	-	-	-	-	-	-	-	-	6,891	6,891
Retained earnings	2,954	2,954	2,954	2,954	6,867	6,867	2,354	1,354	3,835	2,478	2,040	1,731	5,175
Profit/loss for the current year	1,012	2,045	3,365	3,913	1,038	2,034	3,159	4,100	804	1,630	2,656	4,224	1,414
LIABILITIES	21,378	24,018	26,585	29,903	30,926	30,832	33,102	36,708	32,266	31,578	38,373	34,687	37,678
Interest-bearing debt	20,023	22,832	25,311	26,438	27,316	25,586	27,575	31,151	26,894	26,360	33,290	29,412	31,644
Trade payables and other liabilities	1,355	1,186	1,274	1,337	1,596	2,047	2,418	2,121	1,798	1,765	1,751	1,970	2,788
Lease liabilities for right-of-use assets	-	-	-	2,128	2,014	3,199	3,109	3,436	3,574	3,453	3,332	3,305	3,246
TOTAL EQUITY AND LIABILITIES	26,844	30,517	34,404	38,270	40,331	41,233	42,615	46,161	40,905	39,686	47,069	52,065	55,690

Environmental sustainability

CARBON FOOTPRINT

The amount of CO2 released into atmosphere as a result of the activities of DelfinGroup. Footprint include emissions from consumed electricity, heat energy and fuel (Scope1 + Scope2)

CARBON HANDPRINT

Positive climate impact of a product. Handprint shows how much emissions we have saved from selling pre-owned goods instead to producing new goods.

Financial report Definitions for Alternative Performance Measures*

EBITDA

Earnings before interest, taxes, depreciation and amortization = (Profit before tax) + (Interest expenses and similar expenses) + (Rights of used assets depreciation) + (Depreciation of fixed assets) + (Amortization). Used as a measure of corporate performance as it shows earnings before the influence of accounting and financial deductions.

EBITDA Margin

Operating profitability as a percentage of its total revenue, calculated as EBITDA / (Interest income + Grossprofit from sale of foreclosed items). Used as a profitability measure that is factoring out the effects of decisions related to financing and accounting.

Interest Coverage Ratio

Profitability and debt ratio, calculated as ((Profit before corporate income tax) + (Interest expenses and similar expenses) / (Interest expenses and similar expenses). Used to determine how easily a company can pay interest on its outstanding debt.

Cost-to-incomeRatio

((Sales expenses) + (Administrative expenses) + (Other expenses (excluding Loss from cession (debt sales) of non-performing loans)) ) / ((Net sales) – (Cost of sales) + (Interest income and similar income) + (Other operating income) – (Interest expenses and similar expenses))

Return on Equity (ROE)

Net profit for the period/months in the period*12 / ( ((Equity as at start of the period) + (Equity as at period end)) / 2)

Total revenue

Net sales + Interest income and similar income. Represents income generated by Company's business segments.

Interest-Bearing Debt

Liabilities that require the payment of interest,including bonds, other loans, leasing liabilities etc. Interest-Bearing Debt has a priority over other debts.

Cost of interest-bearing liabilities

Weighted average nominal interest rate calculated by amount of interest bearing liabilities as at period end

Equity ratio Equity/Total assets

Non-performing loan ratio 90+ days overdue portfolio share in total loan portfolio

The goal of alternative performance measures is to provide investors with performance measures that are widely used when making investment decisions and comparing the performance of different companies.

* As stipulated by FCMC Regulations on Alternative Performance Measures

Disclaimer

This presentation is ofselective nature and is made to provide an overview ofthe Company's(AS DelfinGroup and itssubsidiaries) business.

Unlessstated otherwise,this presentationshows informationfromconsolidated perspective.

Facts and information used in this presentation might be subject to revision in the future. Any forwardlooking informationmay be subject to change as well.

This presentation is not a legally binding document, and the Company has no liability for any direct or indirectloss from the use of this presentation.

This presentation does notintend to contain all the informationthatinvestors may require in evaluating the Company. Investorsshould read publicly available information regarding the Company to make an investment decision.

AS DelfinGroup Skanstes street 50A Riga, Latvia, LV-1013

IR@delfingroup.lv (+371) 26 18 99 88 www.delfingroup.lv